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Country labor markets

Articles in this subject area summarize the current state of specific labor markets. They cover the labor market issues common to all countries but also highlight important developments specific to each country context.

The world’s second largest economy has boomed,
but a rapidly aging labor force presents substantial challenges

China experienced significant economic progress
over the past few decades with an annual average GDP growth of approximately
10%. Population expansion has certainly been a contributing factor, but that
is now changing as China rapidly ages. Rural migrants are set to play a key
role in compensating for future labor shortages, but inequality is a major
issue. Evidence shows that rural migrants have low-paying and undesirable
jobs in urban labor markets, which points to inefficient labor allocation
and discrimination that may continue to impede rural–urban migration.

Unemployment rose only modestly during the Great
Recession and fell strongly since, with productivity and wages lagging
behind

Experiences during the Great Recession support the view that the UK labor
market is relatively flexible. Unemployment rose less and recovered faster
than in most other European economies. However, this success has been
accompanied by a stagnation of productivity and wages; an open question is
whether this represents a cyclical phenomenon or a structural problem. In
addition the planned exit of the UK from the EU (Brexit), which is quite
possibly the greatest current threat to the stability of the UK labor
market, is not yet visible in labor market statistics.

Might the Belgian labor market be included in
the gallery of “Belgian surrealism”? At first sight, Belgium with its 11
million inhabitants has withstood the Great Recession and the euro area debt
crisis relatively well, quickly getting back on track toward growth and
employment, apparently without rising earnings inequality. But if one digs a
little deeper, Belgium appears to be a strongly segmented labor market,
first and foremost in an astounding north–south regional (linguistic)
dimension. This extreme heterogeneity, along with several demographic
challenges, should serve as a warning for the future.

Youth and long-term unemployment, which
skyrocketed during the Great Recession, were still very high in 2016

Spain, the fourth largest eurozone economy, was
hit particularly hard by the Great Recession, which made its chronic labor
market problems more evident. Youth and long-term unemployment escalated
during the crisis and, despite the ongoing recovery, in 2016 were still at
unsustainably high levels. The aggregate rate of temporary employment
declined during the recession, but grew among youth. Most interesting have
been the narrowing of the gender gap in labor force participation, the
decline in the share of immigrants in employment and the labor force, and the
overall increase in wage inequality.

The transformation of a notoriously rigid labor
market into a role model of its own style is essentially complete

The EU’s largest economy, Germany, has managed
to find an effective and unique combination of flexibility and rigidity in
its labor market. Institutions that typically characterize rigid labor
markets are effectively balanced by flexibility instruments. Important
developments since 2000 include steadily decreasing unemployment rates
(since 2005), increasing participation rates, and (since 2011) moderately
increasing labor compensation. The German labor market has also been
remarkably robust to the impacts of the Great Recession, thus providing a
useful case study for other developed countries.

Overall, employment and wages were accompanied
by a rise in part-time work and a decline in job security

The Netherlands is an example of a highly
institutionalized labor market that places considerable attention on equity
concerns. The government and social partners (unions and industry
associations) seek to adjust labor market arrangements to meet the
challenges of increased international competition, stronger claims on labor
market positions by women, and the growing population share of immigrants
and their children. The most notable developments since 2001 are the
significant rise in part-time and flexible work arrangements as well as
rising inequalities.

A strong resource boom that benefited Canada’s
economy and labor market was followed by a painful adjustment

During the 2000–2016 period, Canada’s economy
and labor market performed well. An important element in this success was
the strong resource boom that lasted from the late 1990s to 2014. Since that
time the economy and labor market have been undergoing a painful adjustment,
a process that is now essentially complete. A good rule of thumb when
examining many aspects of the labor market, such as the extent of
unionization and the level of the minimum wage relative to the median wage,
is that Canada is situated roughly halfway between the US and Europe.